Jersey Shore Business Journal

April 02, 2008

Going, going? Wrong!

By CAROLE MATTESSICH
Correspondent
 

NORTH WILDWOOD – When Beazer Home Corp. purchased the landmark “Moore’s Inlet”

 property in this community for a cool $14.2 million in October 2005, many locals had conflicting feelings. Sure, the plans to construct a 60-unit, upscale condominium project signaled the continued gentrification of North Wildwood, but it also meant the end of a laid-back, waterfront eating-and-drinking establishment that had been wildly popular for almost 100 years.
Local buzz continued loud and strong as the old Moore’s Inlet site was razed and pilings were laid for the new project. Throughout the region, media stories appeared regularly, describing construction progress and the classic design of the massive waterfront building that was taking shape.
But in late March, with the building boom now cooled to the sound of a capgun, Beazer announced that it has retained the Max Spann Auction Company, of Clinton, to auction off 26 of the units available in the recently completed condominium complex known as “The Pointe at Moore’s Inlet.”
Max Spann will conduct the live call-out auction on Sunday, May 4, in a ballroom of the Borgata Casino – a spot chosen for its proximity to potential bidders, according to the auction company’s representative Bob Dann.
“We expect numerous bidders from the Philadelphia and New York areas,” Dann told this paper, adding that his company considers this a high profile auction and expects “a lot of interest.”
According to literature available outside the condominium site, as well as information on the Max Spann website (maxspann.com), minimum auction bids will begin at $175,000 for 13 units originally offered between $529,000 and $869,000, and at $275,000 for 13 units originally offered between $899,000 and $1,249,000.
The 26 units include six different floorplans, ranging from 1,310 to 3,000 square feet. Two of the properties to be auctioned are 2-bedroom units, four are 4-bedroom units, and the remaining 20 are 3-bedroom units.
The auction company is advising interested parties to obtain a “property information packet,” and to attend open houses that will be conducted certain weekends during April. Successful bidders must pay 10 percent of the contract price on auction day, must close within 30 days, and must pay a 10 percent “buyer’s premium” in addition to the final bid price (meaning, for example, that a successful final bid of $300,000 would result in a contract price of $330,000).
Why an auction?
“They (Beazer) wanted to take a progressive way, a different approach to the present market,” Dann explained. “They have a product of excellent quality, and wanted to accelerate sales.”
A survey of land records at the County Clerk’s Office, conducted March 31 by this paper, indicated that only about 14 of The Pointe’s 60 units have sold to date, with the majority of those located on the building’s beach side.
Sale prices reported in recorded deeds indicate that, if the published minimum bids were to end up as actual sale prices at the May 4 auction, it would make for some interesting combinations of financial commitments among neighbors.
For example, among the units being offered at auction are corner Unit 204, originally marketed at $1,199,000, and corner Unit 304, originally marketed at $1,249,000. Each of those units is a 3-bedroom, 3-bathroom “Spring Lake” model with ocean view, and each will be auctioned for a minimum bid of $275,000. According to land records, corresponding corner Unit 104 – just a floor away – was the earliest sold in the project, with the purchasers paying $1,151,083 for that unit in late August 2007.
Interviewed on April 1, North Wildwood’s tax assessor Louis Belasco Jr. confirmed that units at The Pointe presently are assessed for much more than the minimum bids Beazer has announced for the auction. (Belasco cautioned, however, that only a small number of units – those that have received certificates of occupancy – have been assigned “added,” or “final,” assessments thus far.)
Belasco noted that K. Hovnanian’s 96-unit “Tides at Seaboard Point” project, just a short distance from The Pointe, had fared differently. With sales starting in 2006, Hovnanian was able to move 91 units.
That’s an “unbelievable absorption rate, especially in this market,” Belasco said.
“That’s more than three units a month, at a time when most other absorption rates were, at best, one per month,” Belasco said, noting that he attributes the sales to the project “being priced below market value.”
K. Hovnanian, whose project was completed earlier than Beazer’s, dropped its original asking prices by approximately $300,000 in many instances during 2007, with the most recent land records showing units that were originally offered between $800,000 and $900,000 selling in the $500,000’s. Intermediate price reductions made on The Pointe’s units during late 2007 – about $200,000 lower than original asking prices – occurring in a later market, did not have the same effect.
Beazer, a national homebuilder headquartered in Atlanta, Ga., made one other major real estate investment in Cape May County when, in May 2005, it paid the developer of the new Grande Center shopping center in Rio Grande (Middle Township) a total of $8.62 million for property on which it developed an age-restricted single-family housing community known as “Gatherings.”
Land records indicate that sales at that project, which is near the intersection of routes 9 and 47, have been significantly brisker than those at The Pointe at Moore’s Inlet. Gathering’s prices have declined from original asking prices, though not as significantly as they did at The Pointe.
Terms of the May 4 auction include a guarantee that at least four of each of the two groups of 13 condo units will be sold to the highest bidder, so long as the bids are above the minimum. Although the seller retains the right to take the remaining nine units in each group out of auction, Max Spann representative Bob Dann indicated that he does not believe this will occur.
“We’re not putting on a party to cancel it,” Dann said.


Carole Mattessich can be e-mailed at gazette@catamaranmedia.com or you can comment on this story by calling 624-8900, ext. 250.